Comcast: It's totally not a big deal—cash was for Ed Murray's earlier campaign.

[UPDATE Friday 9:35am CT: Ars received a response from the Murray campaign clarifying his position on the city's gigabit project and the Comcast donations, and we have posted it at the bottom of this story. When Ars asked the Murray campaign if the candidate planned on changing the gigabit plan in any way, the answer was a flat: "No."]

Sure, there are a few bright spots of gigabit nationwide, including Seattle, which announced its service nearly a year ago. Seattle Mayor Mike McGinn pushed for Gigabit Seattle, a partnership between Gigabit Squared and the University of Washington. Its goal has been to bring 1Gbps connections to the Emerald City, using fiber that was originally planned for a municipal network.

But now, the Washington Post reports that Comcast has been donating money to McGinn’s rival, state Sen. Ed Murray (D-Seattle). The mayoral election is set for Tuesday, November 5.

Murray, the Post adds, "has committed to honoring the city's existing contracts for a 14-neighborhood pilot project but has shown limited enthusiasm about McGinn's plans to expand the network in the future."

The Broadband Communications of Washington Political Action Committee (BCAW PAC), which gets nearly all of its money from Comcast, donated $5,000 (its single largest donation) to the group “People for Ed Murray” not even a month after Gigabit Squared’s pricing was announced. And who is the president-elect of BCAW PAC? That would be none other than Janet Turpen, the vice president of government affairs for Comcast in Seattle. Turpen herself donated $500 to Murray earlier this month.

Gigabit Squared's 1Gbps service will be priced at $80 per month, while Comcast's Seattle service tops out at 105Mbps (roughly one-tenth the speed), for $115 per month.

Comcast previously gave Murray $700 just one day after Seattle’s gigabit project was announced in December 2012. Comcast told Ars that while this new transfer was reflected on December 14, 2012, it was actually donated in May 2012 as part of Murray's state senate campaign.

And what is Comcast’s response to all of this? Comcast told Ars that these donations were not related to the mayoral campaign but in fact were donations for Murray’s earlier state senate campaign.

“Locally in Washington State, where Comcast has a significant presence of customers and employees, we have supported the State Senate campaigns of Ed Murray for several years including in May 2012,” Sena Fitzmaurice, a Comcast spokesperson, told Ars by e-mail. “Several months after our last contribution, Senator Murray decided not to run for Senate and instead to run for Mayor of Seattle, and converted our contribution to his mayoral campaign. The contribution was not related in any way to any actions of the current mayor and was instead related to our previous support.”

And with respect to the CASE PAC donations?

“Comcast in no way controls or directs the contributions of the CASE PAC," she added. "That PAC gives to a wide variety of candidates, and which candidates they support is in no way determined by us. Also of note is that our giving patterns to the PACs are not related to any particular election, in the case of the Washington Broadband PAC for example, our donation amount is determined by a formula based on subscriber counts in the state."

The Ed Murray for Mayor campaign did not immediately respond to Ars’ request for comment.

UPDATE: On Friday morning, Ars received the following e-mail from Sandeep Kaushik, who describes himself as a "consultant" to the Murray for Mayor campaign. We have reprinted it in full here:

The story in The Washington Post incorrectly implies that Ed Murray might not be supportive of citywide high speed broadband because Comcast has contributed to his campaign. As we made clear to the Post reporter yesterday, Ed does support the City's efforts to create a citywide high speed broadband network, and the speculation in the article that Ed might decide in the future not to support an expansion of the current City plan (to provide service in 14 neighborhoods) is simply wrong.

We've had several thousand contributions to this campaign over the last 11 months, but I've now had a chance to look up the Comcast donation. It was a donation to Ed's legislative race, originally made in August 2012. After Ed announced he was running for mayor in early December, the contribution was converted over (along with dozens of others) to the mayoral race account prior to a fundraising freeze (according to Washington State law, state officials can not raise money for any political campaign from 30 days before the start of a legislative session, until it ends) that went into effect on December 15.

As for why they gave, I can't speak for them. But I can say that there's no doubt that the current mayor's combative style and divisive approach to governance has alienated many, many people, and not just in the business community. It's a major reason why a majority of the City Council has endorsed Ed's campaign (something that hasn't happened in Seattle in at least 40 years), why businesses large and small have endorsed Ed, why 22 labor unions have endorsed (far more labor support than the mayor has received), why Washington Conservation Voters have endorsed, why Planned Parenthood Votes has endorsed, and why the three main mayoral candidates knocked out in the primary have all endorsed Ed and support his campaign.

Promoted Comments

There is a bit of a bright spot in all of this. I live in Seattle and a CenturyLink rep knocked on my door last month. When I saw her ID, I had slotted about a half dozen denials to her sale. Then she spoke: "CenturyLink just wired your neighborhood poles with fiber, and we can offer 40/20Mbps for $35/month. In 6 months, we will have this block wired for fiber to the wall."

Sold. I called Comcast the next t day, where the incredulous rep told me that what I was telling her (fiber in the 'hood, soon to the home) was wrong and I had better watch out. Boy, she made it easy to switch.

I see CL trucks everywhere out here and always thought to myself "Hasn't anybody told these guys the news about DSL being dead?" Looks like they've been laying fiber all over the place these past few years. I've been testing my connection every hour for the last month and have never fallen below 38/18.

This is, unfortunately, business as usual. It has, however given me a reason to vote against Murray, and I was already leaning towards McGinn.

Seattle broadband options are embarrassing for such a tech-oriented city. One of the other candidates in the race early on was Bruce Harrell, who seems like a decent guy, but for the fact he used to work for the incumbent telco, and seems to have been to friendly to them for my tastes during his time on the city council.

McGinn stands out for me because he is afflicted with less of Seattle's passive-aggressive "nice" and because he is actually trying to do something to spur competition in the broadband market via the Gigabit Squared deal, the Google Fiber proposal, and, I hope more (sonic.net, please?).

For now my choices are Comcast, which isn't bad, but is a little pricey an has that cable company shadyness, and CenturyLink, which can still, years into their FTTN build out, only bring me 3Mbps down and less than 1Mbps up. This is in the Greenwood neighborhood, a short commute to the growing number of tech business in Fremont, a short bus ride or drive to UW, South Lake Union and downtown. We have actual sidewalks single family homes on small lots and an increasing amount of infill development. Even worse, Centurylink has buried fiber running down my street!

I've been fantasizing about bringing either fiber or a redundant high-bandwidth wireless link to my house and then building out my own ISP, block by block. I haven't gone so far as to start running the numbers though.

The Murray campaign has gotten back to us. Please see our updated story. Thanks!

199 posts | registered Apr 16, 2012

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

124 Reader Comments

No, they don't. I'm going to try again to explain it, but first I have to enjoy the irony of the conservative trying to explain that only people count, to one who would consider himself the more progressive.

A benefit is not a benefit, until a person benefits. Income is not income, until a person receives it. Inanimate objects, such as automotive starters and legal documents, cannot receive benefits, or income, or anything like that.

If a corporation is more easily able to create a profit as a result of things paid for by taxes, like WalMart being able to deliver goods easily as a result of the interstate system, or Google by the creation of the internet, it can quite easily be said that the corporation has benefited from taxes. And if they have benefited greatly as a result of that tax payer funded largess they should pay a share of that profit as taxes.

They get to pay a greater share of that income in taxes than a human does on their income because they have chosen to run a business as a corporation and have limited liability protections. That is, should the company go bankrupt or be sued, or anything else, only the corporations' assets can be seized rather than the shareholder's assets. This is a choice the founder of a business does not have to make, but it is generally considered a sound choice because so many businesses go bankrupt, and the owner of said business does not have to risk losing their home when it does.

This does not however, in any way entitle the corporation to the full rights of personhood, quite the opposite, limited liability already gives a corporation a privilege an individual does not have, and with that privilege comes restrictions. The owners and shareholders have the same right to vote or contribute to political campaigns as any other citizen, but the corporation does not, they are not a citizen, they have merely been granted certain legal privileges in order to better contribute to the economy. A person has the right to run for elected office, but a corporation does not because they are not a citizen. This is all perfectly just because corporations are not people, they are a legal fiction granting certain privileges and restrictions to those who chose to own or partially own one.

"...they are a legal fiction granting certain privileges and restrictions to those who chose to own or partially own one."

Exactly my point. Taxes are real, and should be levied against real things. Real estate is the first thing that pops to mind as the perfect, real, asset, that real taxes can be easily calculated on using real values. Real income is another. Real, actual, energy usage is a great thing to tax. Real transactions in commerce is another.

When you assess real taxes against virtual, or in your words, fictional entities; you start out in a real mess. A virtual entity can really be anything you want it to be, heck; it was made up in the first place. So you try to codify and legislate this fictional universe as best you can, and things end up getting messier and far more complicated than they need to be.

So then your tax rate becomes based more on the skill of the taxed in negotiating these complications, and less on their income and supposed benefits to society in qualifying for tax breaks. The guys you really mean to go after, end up paying far less than what you mean for them to (in some cases, absolutely nothing); and the businesses you love most; the smaller ones whose owners barely qualify as rich; the ones who've extended themselves for every last cent, trying to grow their business, and our economy, exactly the way we want them to... Well, they end up getting the shaft, one way or another.

They either;

1. report the income, and pay close to 35%; which puts them at a huge disadvantage against their giant corporate competition who legally got out of most of their 35%;

2. carefully plan your business expenses around tax deductions to absorb the income. Large corporations can afford, and do, to devote whole departments, to doing just this. The small business can't of course, do anything like this, and should be focusing on their core competency in any case. (heh, the case of a financial planning smaller business may be an exception to this)

3. Just cheat. Convert the income to cash or goods somehow, and take it under the table. This is the easiest path, until you grow your business to the point that the risk is too much, and you convert to 1 or 2, or become the Mafia. This helps us out, how?

You don't have to do any of it. You can let them do anything they want, big or small, with their own money, and we don't have to keep track of the nuances or detail of any of their internal dealings. At the end of the day, we just need to know the amount of income. If we feel they are under reporting, we still have the IRS, that would be more than happy to estimate their actual income for them. If that income comes from the corporation they own, hopefully they kept good records if they're claiming lower than reasonable income. So really, not much changes in that sense; you still have tax accountants out the ass even if you completely drop the corporate income tax.

But consider the burden threshold here. If it's one, single (not the double tax we have now), reasonable tax rate, that everybody else pays anyway, and nobody gets out of; then the threshold to try to get out of it becomes not worth it. It becomes easier to just pay it as a cost of doing business, and all your competitors are paying the same thing, so there's no business advantage to planning around tax breaks. Plus, and here's the real kicker; you get to actually have your money, instead of having it locked away and hidden in tax-free this or that. Keep in mind, that when Apple holds all that money in Ireland, not only are we doing without the taxes on it, they are also doing without it. Granted, it still belongs to them, but only if they actually let it sit in a vault, and don't touch it. How much would it be worth to them, to be able to take all that money? Apparently, it's not worth 35%. But they would gladly pay some amount above zero to have access to it. And they would grudgingly pay somewhat above that, to get it. At 35%, it's worth everything and anything, not to touch it.

Once you've made the decision, that you're just going to pay the rack tax rate at the end of the year, then you really don't have to keep a single receipt, or spend employee salaries on tax accountants, etc. That would allow you to be free to do whatever the hell you want, without worrying about justifying your existence to anyone. Wow, freedom; what a concept.

Of course in the case that your business actually lost money, it should be an easy enough task to show receipts for costs that exceed business income. The IRS easily looks at that, and determines you paid normal costs, and that the receipts are real, and your savings account is less, or debt is more, and the burden here is still not too great. But since we are talking about a personal, and not a corporate tax, the person would still owe tax on the wage or salary their business paid them. (if they lived in a structure, and drove a car, and ate food and wore clothes for the year; then their income was something, and so their tax is never $0.)

It always surprises me how little the amounts of money involved are. Here it's $5K. Wired had a story about defense industry donating to senators and a correlation with how they voted on intervention in Syria ( http://www.wired.com/threatlevel/2013/0 ... ion-money/ ) and it was on the order of $70K/senator, over five years, or just $14K/year. A single billboard in Atlanta costs $2500 per month, if you get a package deal ( http://fitsmallbusiness.com/how-much-do ... sing-cost/ ). I'm not sure what it costs in Seattle, but all these companies must pay much, much more for advertising than in political contributions, though I imagine having mayors/senators/etc. receptive to your views and willing to take your calls is quite useful. At this rate, if each commenter here contributed $50 we could outspend a giant like Comcast: good for democracy, but seems odd to be that cheap.

Is it just that the going rate for political influence is cheap (due to finance laws), or is it that these official contributions are just an indicator of other, more significant spending (i.e., propping up astroturf organizations, running issue ads, etc.)?

the current mayor's combative style and divisive approach to governance has alienated many, many people

Indeed. On paper McGinn and Murray are virtually identical - for example, both support the notion of increasing the minimum wage to $15/hr or more - but the polls overwhelmingly favor Murray simply because so many people want McGinn out.

Which is why I voted for Murray in the first place, and ever since the update to the article I'm feeling a lot better about it.

FYI, if anyone is still tracking this thread, Mayor McGinn is going down to a pretty major defeat tonight. First results are about a 20 point spread. McGinn isn't conceding yet, but he's already talking defeat.